1602 Avenue L

Galveston, TX 77550

$379,000F

4 bd · 2.0 ba · 2,074 sqft · Built 1897 · MultiFamily · Active · 60 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $3,000/mo
• Mortgage (P&I): −$1,988
• Tax + insurance: −$1,929
• HOA: −$0
• Vac / Maint / Mgmt: −$630
• Net cashflow: $-1,547/mo
• Annual: $-18,559/yr
• Cap rate: 2.75%
• Cash-on-cash: -12.67%
• DSCR: 0.44
• 1% rule: 0.79%
• Cash to close: $106,120

Investor read

• This is a 2 × 2-bed/?-bath units multifamily listed at $379k. Condition is rated good.
• At list price, monthly cash flow is $-2k ($-19k/yr) — negative. Per door: $-773/mo.
• To cash-flow at today's rent, offer at most $281k (25.8% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $300k (20.8% below list).
• It's been on market 60 days — a 3% lower offer ($368k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $281k (25.8% below list) — sets the bar for cash-flow.
• Local home prices are declining (-3.0%/yr); year-one equity from $3k of loan paydown is wiped out by about $11k of value loss. Plan a longer hold.
• Location reads 76/100 on livability (#108 in TX, #3,559 nationally) — a middle-class / working-renter tenant base. Strengths: commute A+, cost of living A+, housing A+; Watch: amenities D+, employment D, crime F.
• Galveston ISD (town): math 33% / reading 39% proficiency, ranked #514 of 826 in TX (top 62%) — families likely to look elsewhere, expect single-tenant / working-renter base with shorter leases; 68% free/reduced lunch — lower-income household profile, screen leases tightly.
• Zoned schools: Oppe El (math 67% / reading 60%, grade B, #291 of 4,322 statewide, top 7%, 610 students, 63% FRL); Central Middle (math 18% / reading 21%, grade F, #1,445 of 1,662 statewide, top 88%, 879 students, 80% FRL); Ball H S (math 17% / reading 44%, grade F, #1,085 of 1,632 statewide, top 67%, 1,934 students, 73% FRL) — zoned schools at 72% FRL track the district average.
• Watch-outs: property tax is 4.3% of price; flood insurance adds $427/mo; built in 1897 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: 720 active listings in the ZIP; 13 comparable units currently listed for rent nearby; rentals lingering (median 48d on market — plan ~5-8 weeks vacancy on turnover, expect pricing pressure); 62% of comp listings sitting > 30 days — soft ceiling on asking rent; 3,258 units permitted in Galveston County in 2024 (0 in 5+ unit buildings).
• Galveston County population projected at +43% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 4 sale attempts since 2y ago with the ask held roughly flat each time — persistent listings suggest the price (not the market) is what's stuck; bring a comps-based counter.
• Climate carrying-cost: in FEMA flood zone AE (mandatory federal flood insurance); severe wind risk, 99% chance of damaging wind over 30y; extreme-heat days projected 7→27/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 2.7% vs local median 0.2% in Galveston — top-decile yield for the area; either an underpriced asset or a hidden risk that comps aren't pricing in. Stress-test before assuming the spread holds.
• This rent per unit runs 40% of the median local income ($45k/yr) — at the standard rent-burdened threshold; future hikes will face affordability resistance.

Questions for listing agent

• What do current leases actually rent for vs. the listed asking? Can we see a recent rent roll and the last 12 months of T-12 income?
• It's been on market 60 days. Have you received any prior offers? Is the seller open to a 26% concession, seller financing, or rate buy-down credit?
• Can we see the unit-by-unit rent roll, current vacancy, and any below-market leases? What's the average tenancy length?
• What capital expenditures (roof, boiler, parking lot, exteriors) have been made in the last 5 years, and what's planned in the next 2?
• Built in 1897 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• Property tax is high relative to price — has the assessment been appealed recently, and will the sale trigger a re-assessment?
• What's the actual annual flood-insurance premium (NFIP or private), and is the property in a SFHA with mandatory coverage?
• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.